Many are calling this the book of the year!
It has 2,500+ Amazon ratings since launching a few months ago.
Here are my highlights from "The Psychology of Money" by @morganhousel
(Thread 👇)
It has 2,500+ Amazon ratings since launching a few months ago.
Here are my highlights from "The Psychology of Money" by @morganhousel
(Thread 👇)
“Financial success is not a hard science. It’s a soft skill, where how you behave is more important than what you know. I call this soft skill the psychology of money.”
— Morgan Housel
— Morgan Housel
1. No One’s Crazy
“Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works.” — Morgan Housel
“Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works.” — Morgan Housel
2. Luck & Risk
“Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort ... They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes.” — Morgan Housel
“Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort ... They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes.” — Morgan Housel
3. Never Enough
“Life isn’t any fun without a sense of enough. Happiness, as it’s said, is just results minus expectations.” — Morgan Housel
“Life isn’t any fun without a sense of enough. Happiness, as it’s said, is just results minus expectations.” — Morgan Housel
4. Confounding Compounding
“$81.5 billion of Warren Buffett’s $84.5 billion net worth came after his 65th birthday. Our minds are not built to handle such absurdities.” — Morgan Housel
“$81.5 billion of Warren Buffett’s $84.5 billion net worth came after his 65th birthday. Our minds are not built to handle such absurdities.” — Morgan Housel
5. Getting Wealthy vs. Staying Wealthy
“There are a million ways to get wealthy … but there’s only one way to stay wealthy: some combination of frugality and paranoia.” — Morgan Housel
“There are a million ways to get wealthy … but there’s only one way to stay wealthy: some combination of frugality and paranoia.” — Morgan Housel
6. Tails, You Win
“Long tails—the farthest ends of a distribution of outcomes—have tremendous influence in finance, where a small number of events can account for the majority of outcomes.“ — Morgan Housel
“Long tails—the farthest ends of a distribution of outcomes—have tremendous influence in finance, where a small number of events can account for the majority of outcomes.“ — Morgan Housel
7. Freedom
“The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.“ — Morgan Housel
“The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.“ — Morgan Housel
8. Man in the Car Paradox
“No one is impressed with your possessions as much as you are.” — Morgan Housel
“No one is impressed with your possessions as much as you are.” — Morgan Housel
9. Wealth is What You Don’t See
“Wealth is the nice cars not purchased. The diamonds not bought. The watches not worn, the clothes forgone and the first-class upgrade declined. Wealth is financial assets that haven’t yet been converted into the stuff you see.” — Morgan Housel
“Wealth is the nice cars not purchased. The diamonds not bought. The watches not worn, the clothes forgone and the first-class upgrade declined. Wealth is financial assets that haven’t yet been converted into the stuff you see.” — Morgan Housel
10. Save Money
“Less ego, more wealth. Saving money is the gap between your ego and your income, and wealth is what you don’t see.” — Morgan Housel
“Less ego, more wealth. Saving money is the gap between your ego and your income, and wealth is what you don’t see.” — Morgan Housel
11. Reasonable > Rational
“Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic and you have a better chance of sticking with it for the long run.” — Morgan Housel
“Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic and you have a better chance of sticking with it for the long run.” — Morgan Housel
12. Surprise!
“The correct lesson to learn from surprises is that the world is surprising. Not that we should use past surprises as a guide to future boundaries; that we should use past surprises as an admission that we have no idea what might happen next.” — Morgan Housel
“The correct lesson to learn from surprises is that the world is surprising. Not that we should use past surprises as a guide to future boundaries; that we should use past surprises as an admission that we have no idea what might happen next.” — Morgan Housel
13. Room for Error
“Worship room for error. A gap between what could happen in the future and what you need to happen in the future in order to do well is what gives you endurance, and endurance is what makes compounding magic over time.” — Morgan Housel
“Worship room for error. A gap between what could happen in the future and what you need to happen in the future in order to do well is what gives you endurance, and endurance is what makes compounding magic over time.” — Morgan Housel
14. You’ll Change
“Long-term planning is harder than it seems because people’s goals and desires change over time.” — Morgan Housel
“Long-term planning is harder than it seems because people’s goals and desires change over time.” — Morgan Housel
15. Nothing’s Free
“Like everything else worthwhile, successful investing demands a price. But its currency is not dollars and cents. It’s volatility, fear, doubt, uncertainty, and regret—all of which are easy to overlook until you’re dealing with them.” — Morgan Housel
“Like everything else worthwhile, successful investing demands a price. But its currency is not dollars and cents. It’s volatility, fear, doubt, uncertainty, and regret—all of which are easy to overlook until you’re dealing with them.” — Morgan Housel
16. You & Me
“A takeaway here is that few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviors of people playing different games than you are.” — Morgan Housel
“A takeaway here is that few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviors of people playing different games than you are.” — Morgan Housel
17. The Seduction of Pessimism
“It’s easier to create a narrative around pessimism because the story pieces tend to be fresher and more recent. Optimistic narratives require looking at a long stretch of history and developments.” — Morgan Housel
“It’s easier to create a narrative around pessimism because the story pieces tend to be fresher and more recent. Optimistic narratives require looking at a long stretch of history and developments.” — Morgan Housel
18. When You’ll Believe Anything
“Stories are, by far, the most powerful force in the economy. They are the fuel that can let the tangible parts of the economy work, or the brake that holds our capabilities back.” — Morgan Housel
“Stories are, by far, the most powerful force in the economy. They are the fuel that can let the tangible parts of the economy work, or the brake that holds our capabilities back.” — Morgan Housel
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